Bitcoin's marked depreciation since the beginning of the month reflects a broad position reduction wave across the market. While the decline in the largest cryptocurrency's market share might suggest investors' shift towards altcoins, data refutes this idea. Analysts interpret the current scenario not as a rotation but as an extensive rebalancing process, clearing out leverage from the market.
Altcoin Season Expectations Rejected by Experts
According to data, Bitcoin fell by 16% over the last month, with its market share dropping from 61.4% to 58.9%. However, during the same period, major altcoins like Ethereum, Solana, Cardano, and Dogecoin experienced sharper declines. This scenario indicates that capital flow is not moving toward altcoins.
Rohit Apte, Head of Markets at Hex Trust, shared that Bitcoin’s decline this month is a continuation of the debt reduction initiated by October liquidations. Apte stated that an altcoin season has not commenced, suggesting that a sustained shift to altcoins would require Bitcoin and Ethereum to achieve price stability within a narrow consolidation range first.
The cross-performance in the market supports this view. The XRP/BTC pair shows limited resistance, while the ETH/BTC pair only slightly declined. Analysts view this situation as indicating selective resilience rather than a leader change. They suggest the current scene reflects an environment where investor appetite for risk has not increased, and instead, they are cautiously reducing their positions.
Blockchain Data Disputes Speculative Movement Claims
Blockchain indicators also support the notion that an altcoin cycle has yet to begin. Data transmitted by Blockscout showcase Ethereum’s ecosystem as active but not overheated. The Base network, particularly bolstered by Coinbase’s Launchpad and Smart Wallet tools, handles approximately 19 million transactions daily, standing out in this aspect. In contrast, other networks like Optimism, Arbitrum, Polygon, and Celo also maintain a stable transaction volume with no significant fee increases. This scenario negates network congestion and fee spikes, typical early indicators of a classic altcoin season.
Experts believe this current market phase is not characterized by risk-taking movements. Instead, it is a restructuring period with reduced liquidity as investors step away from leverage. Until Bitcoin and Ethereum stabilize in a specific range, the likelihood of a robust altcoin recovery remains weak.